Author: Mark Wilson

As more and more products are evolving from how we manage information and data – there has been growth in products in the ethical market . It has served to drive sales of ethical goods and services, which are often more expensive than non-ethically produced products. According to preliminary economic estimates published by National Statistics, gross domestic product (GDP) was 3% higher in Q3 2014 compared with a year ago, while wage growth outstripped inflation for the first time in 5 years during November 2014, after rising by 1.3% in the third quarter of the year — 0.1 percent points higher than consumer price inflation during the same quarter.

Rainforest Alliance products have also continued to increase as a result of a growing availability within the UK, with sales of Rainforest Alliance-certified food products estimated to have risen by 47% during 2013.

Public scandals, such as the horsemeat debacle, as well as a growing mistrust of core bank brands following the LIBOR (London InterBank Offered Rate) scandal, the payment protection insurance (PPI) miss-selling calumny and growing outrage regarding banker bonuses following the recession, along with increased demand for transparency among big businesses, have resulted in the emergence of a much more ethically and environmentally informed consumer.

Sales of organic products have observed resurgence in recent years, following growing consumer demand for transparent product provenance in the light of the horsemeat scandal, as well as more flexible household budgets in line with the economic recovery.

Spending on micro-generation (i.e. household renewable energy systems) has increased by 50%, following the introduction of generous Government incentives, such as the Green Deal home improvement scheme and a sharp increase in solar power home installations during 2014.

Demand for green cars, which offer low-carbon emissions, has increased in recent years, driven by a revival in the new car market, as well as significant new product development (NPD) by several well-known car brands, such as Nissan, Toyota, Vauxhall and Renault, with the electric car market showing record growth of 143.9% up to the end of June 2014, according to figures compiled by the Society of Motor Manufacturers and Traders (SMMT).

The diversification and expansion of Fairtrade schemes to new product sectors, such as jewellery (in particular gold) has also helped to drive sales of ethical products in recent years, while other market sectors, such as eggs, coffee and bananas are increasingly dominated by ethical products.

In recent years, micro-generation (i.e. the generation of electricity or heat of a small-scale, typically for domestic or household use by methods that do not contribute to the depletion of national resources) has continued to increase, with National Grid Energy estimating micro-generation to have risen by 0.5 gigawatts (GW) during the past 3 years. Spending on micro-generation has also increased significantly across UK households, with Ethical Consumer magazine estimating expenditure on domestic renewable energy platforms to have risen by 50% during 2013 alone.

One of the most significant driving factors behind the trend towards more energy-efficient homes has been the UK Government’s Green Deal, which was first launched in January 2013, and offers long-term loans to homeowners to help them make energy-saving improvements to their home, such as the installation of insulation, draught-proofing and double glazing, or renewable energy systems, such as solar panels or heat pumps.

Other Government initiatives introduced with the aim of reducing domestic energy use in the UK include the roll out of smart meters, which allow users to more accurately monitor their energy usage and expenditure; and the Electricity and Gas (Energy Companies Obligation) Order 2012, which was introduced in 2012 and provides funding of around £1.3bn each year to support the installation of energy efficiency measures in low-income households and areas.

Industry analysts believe solar electricity could be cost competitive with gas by 2020, and estimate that around 10 million homes in the UK will need to install panels on their roofs over the next 6 years, if the country is to fulfil its renewable energy potential. If this aim was achieved, it would mean that a third of households in the UK would be generating energy from the sun, allowing the UK to produce around 6% of its annual electricity needs from solar power, with as much as 40% of energy being generated by such panels on sunny days during the summer, by the year 2020.

The drive towards energy-efficient homes is also thought to be having a knock-on effect within the property market, with research undertaken by Knight Frank, in 2014, revealing that houses which have a high Energy Performance Certificate (EPC) rating are now selling more quickly than they did in 2010.

Electric and low-emission vehicles have continued to gain popularity in recent years, following ongoing Government investment into charge points, as well as NPD from leading car brands. The latest statistics published by the SMMT show that 9,955 alternatively fuelled vehicles (AFVs) were registered in September 2014, representing a 56% rise on the number registered for the same time last year.

Making too much of something – overproduction – is generally viewed negatively: it requires additional raw materials, energy, unnecessary work/effort, and waste handling; as none of these add value to the product, overproduction is often regarded as wastefulor quite literally waste if the excess is simply discarded.

Outside of highly automated processes and production lines, there will be waste. Companies often “err” on the side of safety for a production run and produce too much rather than too little which would result in an even more costly additional production run.

But why would anyone want to over produce, in a world were economies scales have for so many years allowed high volume low cost production per unit, one could say that any overproduction and its continuation is no more than a waste of economic resourc.e

Production houses more and more have to balance customer choice as part of the volume needed to create value, Customers are demanding products that are offering so much choice that they are becoming unique, – the world of customer choice has moved to customer customisation and the more customisation the customer demands they more the interact in the creation of the products they need.

Perhaps one other change that’s affecting the one fits all of high volume production low cost products is manufacturing has the ability to establish far more routes to market that was ever possible and create brands and products that can be sold at various parts of the product life cycle with services and delivery times built into every part of production innovation cycle.

With the development of new routes to market and the increase choice that customers are demanding the opportunities to develop processes that allow overproduction as part of extended range of unique product that allows higher value is creating smaller product life cycles that create higher over value.

With the development of newer routes to market and the demand for newer be spoke products the ability to overproduce can be targeted at the growing number of customers that are looking for more customised products: given sufficient quantities, you can think of this excess as “bespoke”, “limited edition”, or “Artisan” product.

Creating the artisan product

Let us look at coffee roasting. Coffee blends are roasted in batches (say 120kg), taken from one or more silos of raw commodity beans.

Given that many batches (up to 20 tonnes) can be roasted each day, how many potential artisan bags of coffee could be produced due to the excess of coffee roasted each day?

We can express the total weight roasted as the sum of the batch weight that is sold as a unit and the overproduction (the excess). Alternatively the overproduction can be expressed as

If the weight of a bag of artisan coffee is Weightbag kg (i.e. kg/bag), then the number of bags produced each day due to “overproduction” can be expressed as

(assuming that Weightroasted does not change).

Given that each Weightroasted is a blend of N silos of raw (commodity) coffee then each Weightroasted can be expressed as the sum of the amounts of coffee (in kg) taken from N silos as

where Weightsiloi is the amount of commodity coffee (in kg) taken from the ith silo.

Assuming that the mixing is uniform throughout the roasting process then the amount of commodity coffee (in kg) taken from the ith silo within a unit batch sold Weightbatch can be simply expressed as

Therefore the overproduction or excess in each batch can be expressed as

or the number of artisan bags that you can make from overproduction in a day can be expressed as

We assumed a constant Weightroasted throughout the day. If this is not the case then Numberbags/day per day can be expressed as

for a constant blend mix, constant Weightbatch, and a weight of an artisan bag of coffee Weightbag

Maximising your excess

Therefore if only weight is considered, for a weight of coffee roasted in each batch Weightroasted, (Weightbatch is fixed) you can increase the Numberbags by

1. Decreasing the weight of an artisan bag of coffee – Weightbag
2. Increasing the number of runs within a day with excess – Numberruns/day

In conclusion

The weight of raw coffee in each Silo is bought as a commodity at a known price. Optimising (minimising) the cost of a blend across the silos along with the production costs will make the Artisan coffee more profitable.

Extending our approach.

Our approach does not include factors such as production loss. These will consider within a future blog post.

In the computer services market, there are various ongoing and emerging trends driving uptake of services across the corporate and public sectors. Some of the key drivers affecting the computer services sector include the use of open

source solutions and the effect that virtualisation technology is having on infrastructure costs and Infrastructure management. It is allowing companies to develop a better technology to create competitive advantage and move away from the one size fits all.

However a huge amount of companies and governments around the world go down this route with great results. It allows then to scope out what you need and slowly roll out a services – these services allow you have customisation and development as part of an ongoing programme and as Part of your Service Level agreement – they are fully backed with training and support. It’s allow you to develop unique data services that are unique to you as part of your overall company strategy and over time to customise and bring greater value. They also benefit you to make statements about how you manage your data and how it is hosted.

The Continuous growth in digital services across virtually all sectors of the UK economy has generated significant demand for computer services and IT outsourcing (ITO).

The proliferation of mobile devices and mobile Internet access has driven demand for mobility services, which provide workers with remote access to client systems. Privacy and data protection are key concerns in the sector, with new up-and-coming regulations and directives from Europe set to impact the market over the next year or two. The new rules could help reduce administrative burdens for European operators through the introduction of a single set of rules on data protection across the EU.

There has been a significant increase in demand for cloud computing services. At present, the vast majority of demand is for software-as-a-service (SaaS); however, opportunities remain to grow other cloud computing services, such as infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).

Public sector IT supply has been affected by tighter central and departmental government budgetary constraints. IT is a key area of investment in the public sector, particularly under the Government’s Digital by Default programme, but austerity has nevertheless placed pressure on contracts.

Now that the UK has voted to leave the European Union, what consequences and effects does it bring to the nation’s food industry, and the businesses under it? Economists and industry figures foresee the following:

1. The opportunity to grow food and drink exports faster.
Around 60% of UK farmers voted to leave the EU, citing its red tape on farming as their main reason. These include the impending ban on glyphosate, which is the preferred herbicide of UK farmers, as well as the Union’s ban on GMO crops. Without these, farmers will be able to grow their crops using their preferred methods.

2. However, leaving the EU could result in higher tariffs and trade barriers between the UK and the EU. What future trading arrangements would look like isn’t clear yet. According to Gary Kushner of Hogan Lovells LLP, the following scenarios are possible:
• EEA (European Economic Area) – like arrangement with the EU (e.g., Norway)
• Bilateral agreements with the EU (e.g., Switzerland) or (should no trading arrangement with the EU be agreed) The UK could be subject to tariffs that the EU applies to all other World Trade Organisation (WTO) members (30% tariff on sugars and confectionery, 20% on tobacco and beverages, 10% on fruit and vegetables, for example).
3. Moreover, food and drink sector could face potential supply chain disruptions.
Richard Morawetz, senior credit officer at Moody’s, said food companies that sourced and manufactured their goods locally would not be as affected as those that relied on imports. Major retailers such as Tesco, Morrisons, Marks & Spencer and Next, are focused on British sales, but their supply chains could be affected if the UK were to impose import tariffs on EU suppliers.

4. Food retailers and restaurants may be hit by higher wages.
Many food businesses run on immigrant staff, so the decision may curb their ability to recruit staff at lower wages from other European countries. Businesses that have had problems meeting their recruitment needs in the UK may also be hit. Food manufacturers and restaurants have the highest share of foreign-born workers, according to the Migration Observatory at the University of Oxford.

5. The food industry may benefit more from scientific advances in the UK.
The EU’s so-called scepticism of science has hampered progress in the UK food industry, according to Owen Paterson, leading Brexit campaigner and former secretary of state for Environment, Food and Rural Affairs. The decision will allow the UK to weigh both risks and benefits of new technology without being hampered by existing technologies in the EU.

The growth of the financial products is growing in China and the regulation, as I understand is changing.

There is a growing need for a well-governed brand that links the economies in the West with that in the East in this space – and there are structures that can implemented here to add value in China.

Below are some points on China’s Insurance market:

China’s insurance industry has been something to behold. Assets managed by insurers have doubled in less than four years to 13.9 trillion yuan ($2.1 trillion). Their revenues from selling policies have accelerated, climbing 42% year-on-year in the first quarter of 2016.

The population will get much older in the coming decades, but the public pension scheme is still in its infancy. By supplementing public coverage with private policies, the government hopes that people may just manage to escape penury in their old age.

The government covers roughly a third of medical expenses; and insurance companies less than a tenth, leaving individuals to pick up more than half the tab themselves, according to Enhance International, an insurance consultancy. That is an especially heavy burden, naturally, for the elderly.

But excessively rapid growth, built on flimsy business models, risks doing more harm than good. There have been plenty of worrying signs. The most aggressive firms have scaled up by offering guaranteed returns of 6% or more on short-term investment products, an extremely risky strategy for what is supposed to be a sober and reliable industry.

This month regulators turned their attention to some of the insurers that have been among the boldest in expanding. First they sent inspectors to Sino Life Insurance Co, which has run down its capital in recent quarters. Then they went to Anbang, which has increased its assets some 50-fold over the past two years.

China has also overhauled solvency rules, which should force insurers to change the way they operate. Capital requirements had been based on simple gauges of size. Now they are much closer to the norm in developed markets, varying in line with how quickly policies turn over and how premiums are invested.

There are now opportunity for the development of a data brands to enter the Middle East and North Africa. As the region is tagged as the fastest growing, it presents both tremendous opportunity, but also tremendous risk. A partnership with a data company which adheres to globally recognized data governance and data privacy laws will enable a Middle Eastern company to take advantage of both growth opportunities, and the chance to develop stronger data privacy and protection policies, even as an individual company.

The quality of information in the world is soaring. And the need to store manage and develop data systems is critical.

The deluge of data is already starting to transform business, government, science and everyday life. This deluge has huge potential for good, as long as consumers, companies and governments make the right choices about when to encourage flow of data, and when and how to restrict it.

With the Middle East and North Africa as the fastest growing region in the world for data growth, much potential is seen in this sector, but there is also much risk involved.

This strategy was crafted based on our study of the growth of data centres in the Middle East, as well as the data landscape in major countries in the region. Consequentially, we also took a look at how this affects government policies on data use, how Arabic countries rank globally for data governance and protection, and what can be done to improve them.

For my next post, I’ll be sharing with you my findings on the Health Care industry in Saudi Arabia and our recommendations specific to Data and Digital.

With Saudi Arabia’s new leadership and notable economic reforms, the outlook for foreign ventures and investment is promising. BigOnIT are exploring various opportunities in Food, Healthcare and Food Security in the Middle East.

This blog series provides an update on our ventures in the region, as well as the current business landscape as I see it.

See Part 1: Food Security and Food products in Saudi Arabia

With thousands having access to the Internet and going online every year, in addition to the boost in mobile commerce traffic, the Arab peninsula has become the fastest growing e-commerce sector in the world. According to ArabWorld’s Online Payment Report for 2014, which covers the UAE, Saudi Arabia, Egypt, and Kuwait, the following developments are taking place in the Arab e-commerce sector: [8]

There are more credit card holders, but COD is still strong.

In the UAE, 60% of the 3.65 million e-commerce customers are located in Dubai, while another 27% are in Sharjah and Abu Dhabi collectively. In Egypt, 27% of e-commerce purchases are paid for with a credit card, while cash on delivery makes up the remainder.

Average cash-on-delivery (COD) orders had a minor decrease of 0.8% in the last year, decreasing from $114 in 2013 to $113 in 2014. Credit card orders meanwhile had a 49% increase in the last year, increasing from $155 in 2013 to $168 in 2014. Overall, there was an increase in e-commerce basket size in the UAE.

Online basket size is growing in the Arab peninsula.

Saudi Arabia saw an overall increase in e-commerce basket size. There was an increase of 8% for cash-on-delivery orders in the last year, increasing from $143 in 2013 to $154 in 2014. Credit card orders then saw a 32% increase in the last year, increasing from $96 in 2013 to $127 in 2014.

Egypt saw the largest increase in e-commerce basket size. There was an increase of 16% cash-on-delivery orders in the last year, increasing from $83 in 2013 to $96 in 2014. Credit card orders then saw a 36% increase in the last year, increasing from $71 in 2013 to $96 in 2014.

Arabs use mobile commerce twice as frequent as the rest of the world.

People in the Arab World transact on mobiles more than the global average. 41% of smartphone users in the Arab World transact online, while only 21.3% of global smartphone users transact online.

18 to 26 year olds make up the largest demographic group of mobile payment users with 39% of the market. This age group is expected to reach $2.45 trillion in transactions worldwide by 2015. The next largest group is the 27 to 39 year olds with 31% of the market, followed by 40 to 61 year olds with 26%, and 62 and older with 3% of the market.

All these indicate that there is a large opportunity for online coffee roasting in Arab countries, particularly Dubai and Saudi Arabia. Not only are young consumers driving coffee consumption, they are also the leading users of e-commerce in the region, proving that online coffee ecosystems have a chance to flourish in the market. It should be emphasized that young consumers specifically look for premium coffee experience coupled with convenience, both aspects that Newbeans CTAPS system can provide.

Of importance will be the provision of COD options and mobile-responsive e-commerce pages given the habits stated above.

In my next post, I’ll be sharing with you the strategy we’ve made for BigOnIT and Newbeans Coffee’s entry to the Middle East and North Africa.

For Disruptive Technology (or is it?) Mark discusses examples of how technology is providing more opportunities for companies, and how disruption of traditional models is becoming an every day occurrence.

Mark Wilson has worked across many different industries, with a specialisation on the impact of Technology. He started off his career working for Japanese consumer electronics companies and property development. Since then, he has used technology in various industries and many unique applications – such as the development of Property Renting, Supply Chain, and Food Distribution.

He is now also the founder of Newbeans Coffee, a pioneering online coffee roaster; and BigOnIT, a full service digital consultancy that offers strategic assistance to companies and management teams, who aim to better understand the use and development of technology.

With Saudi Arabia’s new leadership and notable economic reforms, the outlook for foreign ventures and investment is promising. BigOnIT and Newbeans Coffee are exploring various opportunities in Food, Healthcare and Food Security in the Middle East.

This blog series provides an update on our ventures in the region, as well as the current business landscape as I see it.

Traditional Arab coffee is usually purchased in markets and souks, and what sets it apart from coffees in other nations are the addition of spices. A variety of items such as cardamom, cloves, and saffron, in addition to coarsely grounded Arabic coffee beans, are used for its making. [5]

The recent years, however, saw the increasing variety of coffee becoming available in restaurants, cafés as well as retail outlets and they are more similar to the coffees consumed in Italy or the USA.

In Saudi Arabia, specialist coffee shops have nearly doubled in value between 2008 and 2013, due to their aspirational image and innovative coffee drinks. The interest in specialist coffee shops is also influencing the retail market, as young consumers seek to replicate the trendy coffeeshop drinks at-home. [5]

And while fresh coffee is the format used to brew traditional Arabic coffee, instant coffee is the most preferred category by young consumers in Saudi, due to its convenience and variety of flavour options. In particular, young consumers are drawn to instant coffee mixes like 3-in-1’s and instant Specialty Italian coffees that aim to emulate coffee drinks like cappuccinos and lattes. Again, this is with the desire to recreate the coffee shop experience without extra effort.

Meanwhile, in Morocco, instant coffee is still the most popular type of coffee, but fresh ground coffee pods are gaining so much popularity in Morocco as coffee pod machines are becoming more available in different large retail stores, like Marjane and Carrefour. [5]

In Dubai, the center of development and trends in the region, on-trade sales are also growing strongly, boosted by the influx of business and leisure tourism. Despite the growth of coffee shops and independent roasters, instant coffee still takes the cake. [5]

In my next post, I explore trends in the e-commerce industry in Saudi Arabia. They are now the biggest mobile users in the world, and this opens a lot of possibilities in selling specialty coffee online in Saudi Arabia and other Middle Eastern market – making it a great time for Newbeans CTAPS system to enter the market.

The need for companies to consider their information in a way that assist in the creation of new business models that manifest themselves on how organisations can create services and products from how they manage information and data is becoming more apparent.

Most companies have understood the need to hire digital experts — such as Chief Digital Officer, whose job is to spot potential challenges and create revenue opportunities from the information and data of the organisation as well as protect the company from new emerging models that can ultimately disrupt traditional business models.

For when disruption occurs — the CDO can give some degree of insulation from mainstream operations to save newcomers from being swamped by short-term imperatives.

The obsession with digital disruption has reached a flashpoint with the arrival of the smartphone, which is the platform for an invasion of older companies’ hallowed grounds. The success of online lift-sharing company Uber has become an example for entrepreneurs out to attack industries once thought immune to digital upheaval.

From taxi drivers to television networks, from filmmakers to restaurants and banks, the ways in which individuals and companies do business is metamorphosing so quickly that many companies find it hard to keep pace.

For all that, the need to overhaul business processes, forge digital links with customers and, in some cases, recast entire revenue models can still be pressing. A common error is failing to pay attention to the bigger picture, says Surajit Kar, a principal at management consultancy PwC. Distracted by day-to-day events, or by minor adaptations to existing businesses, companies become stuck on the incremental instead of looking at the real game-changing forces in their markets, he says.

The ways in which digital markets tend to evolve can catch out the unwary and opportunities are often to be found between existing markets, says Mr Kar. In industries such as healthcare and financial service, for instance, digital competitors often use technology to insertthemselves as intermediaries in different ways. Start-ups such as US based Practice Fusion, for instance, have used the spread of electronic medical records and other clinical data to create markets in the healthcare field, such as selling data to insurance and pharmaceutical companies.